Business Analysis Overview

Business analysis is a type of analysis focusing on identifying and describing solutions to the needs of the enterprise. As mentioned in the previous chapter, there is no rule defining how detailed the solution description should be. However, the boundary is usually set by the technical design, which is the subject of the systems analysis, not the business analysis.
The whole discipline is standardized by the International Institute of Business Analysis through the BABOK Guide BABOK (Business Analysis Body of Knowledge). The official BABOK definition of BA is:

"Business analysis is the practice of enabling change in an enterprise by defining needs and recommending solutions that deliver value to stakeholders. Business analysis enables an enterprise to articulate needs and the rationale for change and to design and describe solutions that can deliver value.

Business analysis is performed on a variety of initiatives within an enterprise. Initiatives may be strategic, tactical, or operational. Business analysis may be performed within the boundaries of a project or throughout enterprise evolution and continuous improvement. It can be used to understand the current state, to define the future state, and to determine the activities required to move from the current to the future state."

From the BABOK description, it follows that the core of the business analysis lies in identifying business needs and determining solutions to them. Need is any problem the organization must or want to solve or an opportunity which it would be beneficial for the organization to take advantage of. Addressing the needs is done through solutions, which represent the specific ways of satisfying the problems or which enable the organization to take advantage of the opportunity. The solution could be a single change such as a new IT system, or it could be composed of multiple solution components such as people, infrastructure, hardware, software, equipment, facilities, and process assets or any combination of these sub-parts. Although introducing a new system or changing the legacy one is a part of most solutions, the solution space is much broader, and focusing just on the systems is running the risk of developing an incomplete solution.

The person who performs business analysis activities is called a business analyst. Business analyst plays a key role in discovering the goals the organization wants to achieve as it is not always an easy task to find out what really needs to be changed. Stakeholders often state what solution they want, and it is the business analyst who is responsible for eliciting the actual needs behind these desires. Also, this information is provided by a large number of people, which requires the analyst to synthesize the information from multiple sources. What is more, different groups could have various opinions on what is needed or how to achieve it, so business analysts often play a central role in aligning the needs of business units, facilitate communication, and may serve as a "translator" between those groups.

Sometimes people call business analysts requirements engineers. Even though requirements analysis and management are essential components of the business analysis, just eliciting requirements would not help anybody. True business analysts are strategic: they ask why the change is needed, not just what requirements are needed. To help you understand the actual business analyst responsibilities, we provide the following list of activities as they are defined in BABOK:

According to BABOK, the business analyst is responsible for

understanding enterprise problems and goals
analyzing needs and solutions,
devising strategies,
driving change, and
facilitating stakeholder collaboration.

"If the business analysts are in IT with the purpose of writing requirements, it's a missed opportunity."

– @RogerBurlton

Business analysts are among the first to be presented with the identified business need and asked to analyze the need and propose possible solutions. To accomplish this, it is very often needed to gather information from various people (both within the company or from the outside), challenge their opinions by organizing and facilitating meetings, and outline possible solutions.

EXAMPLE

Board of members of the Effecta Bank has decided that the number one strategy for the upcoming year is to streamline the product portfolio. The first step is to merge Current Account (account into which your salary goes) with Overdraft (a product which allows you to withdraw more money than you have on the current account). It means that when opening a current account, the client will automatically be able to use overdraft without asking for overdraft product separately.

This is a huge project which impacts almost all parts of the bank. It will change the process of opening the account at the front desk and through all digital channels, changing templates for contracts, altering the methodology, and modifying multiple reports to reflect the new rules. All the changes will have direct impacts on IT. The front desk system, internet/mobile banking, and reporting systems must be modified. A new marketing campaign and training for employees must be prepared. The business analyst will not execute all parts but is responsible for recommending the solution, identifying its components and activities, and driving the whole initiative making sure it's going to be successful.

From the example above, it is clear that the business analyst's daily work is not a walkaway. The business analyst should have a solid understanding of the business area of the whole organization both from the business perspective (products, processes, operations) and from the IT perspective (systems and applications, IT architecture and IT processes). On the one hand, a business analyst should be able to suit up and facilitate a meeting with top management representatives to get high-level business goals and discuss possible solutions. On the other hand, the role also requires the ability to discuss the IT side of the problems with not really easy-going IT guys. They do not give a damn about some business needs, and their role is just to be angry at you because they still haven't had their budget approved by the bloody business people.
Being a SME and IT guy at the same time, switching context, memorizing tons of information from different areas, negotiating and dealing with various people of various characters, calming down everybody during an escalated meeting, staying high-level and preparing extra-simple presentations for executives while also modeling low-level IT scenarios for gurus from IT, that is the BA world.

AND YOU ASK...

Regarding the example from the bank, is it really business analyst who should be analyzing the impacts of implementing the new regulatory requirement? Business representatives know the processes better, shouldn't it be them to analyze the impacts?

The problem is that in big organizations, there is usually nobody who knows the whole organization and all processes. Each business representative knows only a small portion of it and can't foresee the impacts of implementing the requirement on the enterprise-level. This is when the business analyst steps in and why it is such a crucial role.

Unfortunately, it is not always the business analyst who is asked to define the needs and who sets boundaries of the project. In our experience to build up the solution on solid foundations and to reduce the risk of implementing something which is not really aligned with the business goals, an experienced BA should be invited right at the beginning. Neither businesspeople nor project managers have the appropriate skills to understand the business problem thoroughly, evaluate all alternatives, and take into account existing constraints. In the beginning, it may look like a piece of cake, but it may turn into a nightmare. Letting business people or project managers analyze the problem might strike you in the future as you realize the ambiguous requirements, feature gaps, and vague language will require more time to be spent on building the solution that it was expected.

Systems analysts and project managers are good at ensuring that things are being done right, but only good business analysts can ensure that the project is doing the right thing.

Becoming a Business Analysts

Business analysis is a discipline lying on the borderline between business and IT, which also determines from which areas the business analysts usually come from. In most cases, the business analyst is either a former technical person who became an SME in some business domain and invested time to gain required soft skills or contrary, an SME who decided to get the required technical background. It cannot be said which way is better, and nobody will ask what the BA had been doing before became the BA, as long as his or her work leads to quality solutions that provide value to stakeholders.

From a Developer or Systems Analyst

(+) Analytical and structured thinking
(+) Understanding of technology and software engineering
(+) Ability to assess the technical feasibility of the solution even during the initial phases
(-) Need to learn business domain
(-) Usually lack the required soft skills
(-) Tendency to focus solely on the technical aspects of the solution

From a Business Person

(+) Deep knowledge of the business domain, capabilities of the organization and its processes
(+) User knowledge of information systems and applications
(-) Usually limited abstract thinking
(-) Lack of IT skills
(-) Outlined solutions lack the required detail needed for assessing technical feasibility

Each option has its pros and cons, but no matter what the future business analyst's former role, neither a talented developer nor a technical SME can automatically be an effective business analyst without proper training. Also, the truth is that more business analysts come from the IT area than from the business. The reason is obvious. Solutions outlined by business analysts usually include IT changes, which must be feasible from an IT point of view, and the need to roundtrip each change with an IT specialist slows everything down. It is, therefore, much easier for an IT specialist to learn the soft skills, business domain, and strategic thinking, than to make a business people start thinking structured and teach them modeling or basic software engineering principles.

Need: A problem or opportunity to be addressed.
Business need: Business needs are the problems and opportunities of strategic importance faced by the enterprise. An issue encountered in the organization, such as a customer complaint, a loss of revenue, or a new market opportunity, usually triggers the evaluation of a business need.
Solution: A specific way of satisfying one or more needs in a context.
Stakeholder: A group or individual with a relationship to the change, the need, or the solution.
SME: A subject-matter expert (SME) or domain expert is a person who is an authority in a particular area or topic.